California Employers Will Continue to Face Increased Regulations for Background Checks

California Employers Will Continue to Face Increased Regulations for Background Checks

On August 20, 2018, the California Supreme Court ruled in Connor v. First Student, Inc. that employers must comply with two overlapping state statutes that regulate the procedures for procuring and using background checks for employment. The court rejected the employer’s argument that the overlap caused the Investigative Consumer Reporting Agency Act (ICRAA) to be unconstitutionally vague, and it concluded that employers must continue to follow both the ICRAA and Consumer Credit Reporting Agencies Act (CRAA). As Nilan Johnson Lewis labor and employment lawyer Veena Iyer explains, employers have no choice but to consult both laws to determine whether one, both, or neither applies to a background check and then attempt to comply with their differing requirements. “The court’s decision is the most recent development in a year of increased regulation of background checks, particularly at the state and municipal levels in California, as well as in other jurisdictions such as Massachusetts and Pennsylvania,” says Iyer. “Failure to comply with differing state and federal technical requirements can easily expose employers to class-wide liability, penalties, and damages.” As a result, Iyer advises employers to review policies, procedures, and paperwork since background checks are a prime target for class or PAGA litigation. To speak with Veena Iyer about background check compliance, contact her at viyer@nilanjohnson.com or 612.305.7695.

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